Having insurance has assumed greater importance over the years since travel, inland and overseas, has become easier for you and on your pocket. "The rise in the number of travel operators offering incentives and discounts, cheaper airfares and increased spending by the urban population has increased the number of travellers across the world and within the country," says Tapan Singhel, chief marketing officer, Bajaj Allianz General Insurance. In fact, increased travel is giving a boost to travel portfolios of insurance firms. "The travel insurance industry is growing at the rate of 20-25% annually," informs Sanjay Datta, head of customer service, ICICI Lombard General Insurance.
However, this is still low when compared with developed nations. "Insurance penetration in the west and in Japan is almost 100%, whereas, in India it's at around 20% for international travel and negligible for domestic travel," says Gaurav Garg, MD & CEO, Tata AIG General Insurance.
All too often we travel uninsured because we look at it as a superfluous cost, where money spent is money wasted. "Leisure travellers are usually price sensitive, which is why many are reluctant to buy travel insurance," says Singhel.
"One of the prime reasons for reluctance to buy travel insurance in India is lack of awareness. The need to cover your trip is rarely felt unless it is compulsory to have travel insurance before obtaining the visa," says Antony Jacob, CEO, Apollo Munich Health Insurance.
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Like motor insurance, making travel insurance compulsory would boost sales but will this benefit buyers? "A mandatory clause benefits both insurers and customers. With more people buying travel insurance, insurers will have more volume to cover their risk and can price products better," says Garg.
Reasons to Buy
Imagine arriving at your destination with your baggage missing, including your passport, or falling sick and then having to fort medical bills in a foreign country. The benefits of travel insurance far outweigh its cost. A typical plan will cover accidents and sickness (including medical evacuation, repatriation), airport mishaps (baggage loss, flight delays or cancellation, loss of passport) and emergency financial assistance. Another important feature is the personal liability cover, which comes in handy in the case of unintentional damage to others' property. Make sure to have this, especially when travelling with kids. All this would cost you only as much as 5-6% of your air fare.
Though many agree that travel cover is a must when travelling abroad, most are doubtful of its need during domestic travel. "You could skip travel cover for domestic trips as health and accident policies should cover these exigencies," says Mukesh Kumar, head, Strategic Planning Group, HDFC ERGO General Insurance.
Even so, "though some airlines cover the delay and cancellations, others don't. Therefore, if you travel frequently, you might consider taking a cover," says Yashish Dahiya, CEO, policybazaar.com.
The Right Plan
There are separate policies designed for individuals, families, students going abroad, frequent flyers and one even for those in the golden years of their lives. So which one is best suited for you? Singhel says, "Choose a policy as per individual requirements, considering duration of travel, cover required and countries being visited. The right features also help in saving premium."
Datta also advises you do a comparative analysis before buying a policy. "The buyer should compare offerings, including online services, claims process, payment options and tie-ups with facilitators and service providers abroad," he says. Moreover, the insurer should be a recognised player with a good track record. "The buyer should always check a company's claims settlement history," adds Singhel.
Terms and Conditions Apply
Do not forget to read the fine print and pay attention to the exclusions. "Any insurance policy would have broad exclusions and waiting periods for effective coverage," says Jacob. Along with this, also get information on the documents required to file a claim. Documents required for loss of baggage would differ from those for medical evacuation. "One should always carry his policy documents along. A good way is to have them online so that they can be accessed anytime and anywhere," says Datta.